EXHIBIT 10.2
MODIFICATION TO EMPLOYMENT AGREEMENT
This Modification to Employment Agreement is made and entered into as
of the 19th day of December, 2002 by and among Xxxxxxx X. XxXxxx ("Executive"),
Hostcentric, Inc., a Delaware corporation ("Hostcentric") and Interland, Inc.,
a Minnesota corporation ("Interland").
WITNESSETH:
WHEREAS, Executive and Hostcentric entered into that certain
Employment Agreement dated May 5, 2000 ("Employment Agreement") pursuant to
which Executive became a member of Hostcentric's senior management team;
WHEREAS, Hostcentric is executing that certain Agreement and Plan of
Merger of even date herewith (the "Merger Agreement") with Interland, Bobcatcub
Acquisition Corporation, a wholly-owned subsidiary of Interland ("Merger Sub")
and certain individuals in their capacity as stockholders' representatives of
the Hostcentric stockholders pursuant to which Interland will acquire
Hostcentric as a result of the merger of Merger Sub into Hostcentric (the
"Merger");
WHEREAS, in order to induce Interland to execute the Merger Agreement
and consummate the Merger, the parties desire to modify certain provisions of
the Employment Agreement, and agree to other joint undertakings so that
Executive will provide certain transition services to Interland after the
closing of the Merger in consideration for payments to be made to Executive by
Interland.
NOW, THEREFORE, for and in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Tolling of Term of Employment Agreement. The Initial Term (as
defined in Section 4(a) of the Employment Agreement) shall be tolled from the
date of this Agreement until the earlier of: (a) the termination of the Merger
Agreement, or (b) the closing of the Merger (such date in (a) or (b) being the
"Resolution Date") . As a result of such tolling, the ninety (90) day period
prior to the end of the Initial Term before which either party under the
Employment Agreement must deliver written notice to the other of its intention
not to renew the Employment Agreement shall not commence until seven (7) days
after the Resolution Date.
2. Effect of Closing of Merger. In the event that the Merger closes:
(a) Interland shall pay Executive on the Closing Date of the Merger
$300,000 in immediately available funds (to be reduced by employee's
share of applicable
federal and state payroll taxes) in consideration for Executive's
delivery of a release to Interland and Hostcentric in form acceptable
to Interland pursuant to which Executive will waive any claims against
Hostcentric and Interland under the Employment Agreement, including
without limitation claims for compensation under Section 2, rights on
termination under Section 4 and Change of Control payments under
Section 11. The release shall also contain an express acknowledgement
from Executive that Sections 3, 5, 6, and 7 of the Employment
Agreement shall remain in effect after the Closing. Notwithstanding
the foregoing, the parties hereto agree that the reference to the
duration of the Noncompetition Agreement in Section 3(a) of the
Employment Agreement is hereby changed from "two (2) years" to "one
(1) year" immediately following the termination of Executive's
employment.
(b) Executive shall remain in the employ of Interland or Hostcentric
for up to ninety (90) days after the Closing at the same compensation
and with benefits comparable (but not necessarily with the same title
or job responsibilities, but not given menial or demeaning positions)
to those provided for under the Employment Agreement and to assist in
the transition of Hostcentric's business to Interland during this
post-Closing period. Interland shall pay Executive an additional
$94,611.47 in immediately available funds (to be reduced by employee's
share of applicable federal and state payroll taxes) promptly after
such ninety (90) day post-Closing period for accrued paid time off and
medical benefits compensation owed to Executive. Failure of Executive
to reasonably fulfill the obligations set forth in this Section 2(b)
shall constitute a breach of this Agreement and Executive shall be
liable for all damages incurred by Interland or Hostcentric as a
result of such breach, not to exceed $300,000.
3. Effect of Termination of Merger Agreement. In the event that the
Merger Agreement is terminated for any reason and the Merger does not close,
the tolling of the Initial Term shall cease seven (7) days after the Resolution
Date and the Employment Agreement shall otherwise remain in full force and
effect.
4. Notification of Future Employment. If the Merger closes and
Executive ceases to be employed by Interland, Executive shall notify Interland
in writing prior to accepting any subsequent employment or consulting position
during the one (1) year period after the Closing of the Merger so that
Interland can verify such position does not constitute a violation of Section 3
of the Employment Agreement.
5. Governing Law. This Agreement shall be governed by the laws of the
State of Texas.
6. Multiple Counterparts; Facsimiles. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original and all of
which, taken together, shall constitute one instrument. A facsimile signature
of this Agreement shall have the same legal effect as an original thereof.
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7. Notices. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:
To Hostcentric: Hostcentric, Inc.
Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: President
Fax No.: (000) 000-0000
To Executive: Xxxxxxx X. XxXxxx
Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
To Interland: Interland, Inc.
000 Xxxxxxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Fax No.: (000) 000-0000
Notice shall be deemed given and effective on the earlier of three (3) days
after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually
received by means of hand delivery, delivery by Federal Express or other
reputable courier service, or by facsimile transmission. Any party may change
the address for notice by notifying the other parties of such change in
accordance with this Section 7.
8. Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it will be modified rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to
the extent possible. In any event, all other provisions of this Agreement will
be deemed valid and enforceable to the full extent.
9. Amendment. This Agreement may not be amended except by an
instrument in writing executed by each party hereto.
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IN WITNESS WHEREOF, Executive, Interland and Hostcentric have executed
this Agreement as of the date first written above.
HOSTCENTRIC:
Hostcentric, Inc.
By: /s/ Xxxxxxx X. XxXxxx
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Name: Xxxxxxx X. XxXxxx
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Title: President and Chief Executive Officer
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INTERLAND:
Interland, Inc.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: CFO and General Counsel
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EXECUTIVE:
/s/ Xxxxxxx X. XxXxxx
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Print Name: Xxxxxxx X. XxXxxx
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